The Impact of the Healthcare Bill: Lots of Questions Remain

The recent signing of the health care bill will have a profound impact on all U.S. citizens; however, whether that impact will be positive or negative is subject to debate.

The significance for those who have not had access to affordable health insurance is undeniable to most. In particular, if you have a pre-existing condition and do not currently have medical coverage, you are likely to benefit.

At an event in Ohio, which many have called pivotal in the passage of the bill, President Obama called upon congress to put people's wellbeing ahead of their own political wellbeing. Obama was quoted in the New York Times as saying, "The American people want to know if it's still possible for Washington to look out for their interests and their future. They're waiting for us to act. They're waiting for us to lead." He added, "They want us to look and see what's the best thing for America and then do what's right."

Obama was successful personalizing the issue by focusing on real people with pre-existing conditions that have been denied coverage and did not have access to affordable health insurance.

Health Insurance Companies Take Some Heat

What about the skyrocketing cost of health care? The health insurance industry has been the target of much anger and concern, and perhaps for good reason. The California Attorney General recently announced a high-profile investigation of California health insurance companies based on reports that they may be denying 39.6 percent of claims, while dramatically increasing health insurance rates.

This investigation comes on the heels of a recent announcement by Anthem Blue Cross that health insurance companies plan to increase health insurance rates in California by 39 percent for roughly 800,000 individual health insurance policy holders. These rate increases are being investigated by an independent California-appointed actuary to reveal if Anthem is in violation of state law by spending less than 70 percent of its premiums on benefits.

In another major development, the U.S. House of Representatives recently revoked the insurance industry's antitrust exemption by an overwhelming margin. This decision is designed to increase competition in order to help bring down rates, but will it be successful?

Despite being in the crosshairs, it's unlikely that the insurance industry is solely responsible for rising healthcare cost? A recent study published in the Journal of Health Affairs notes that on average, the rates hospitals charge insurance companies are 30 percent higher than Medicare rates, and physician rates are 20 percent higher. The study also notes that hospital rates have increased 10 percent annually, twice as much as their costs have risen on an annual basis.

The Journal of Health Affairs study also points to monopoly-like behavior with market consolidation by large hospital chains and physician groups. According to the study, this market power has given them increased leverage when negotiating rates with insurance companies, thus driving up insurance company rates.

The nation has been polarized with passionate and heated debate, but there is only one thing we know for sure--there is a great deal of uncertainty ahead.